The Old City is a great place to start your exploration of downtown Philly. I recommend:
Exploring 2nd and 3rd Streets in the Old City: This is the oldest part of the city along the waterfront that has been reborn with new lofts, shops, galleries and restaurants. Here there were many high-end home furnishings and design stores north of Market Street on 2nd St. and some great galleries on 3rd St. and 2nd St. also. There are First Friday Art Walks sponsored by Old City Arts, so make sure to go if you are in town.
Nearby is the famous Betsy Ross House and charming Elfreth’s Alley, the oldest residential street in the US. There is also the Arden Theater Company at 40 N. 2nd St., which is a regional theater company offering plays for adults and children. It has a strong commitment to developing and producing new work.
Eating in the Old City: On and near Market Street there are many small restaurants featuring everything from sushi to Cuban food to Philly Cheesesteaks.
I had a great lunch at Fork at 306 Market Street. Having been recommended by friends, it has won many awards. High Street on Market (formerly Fork Etc.) is next door which offers more coffees, sandwiches, salads, soups and other gourmet take out items. After lunch, I headed to The Franklin Fountain at 116 Market, an old soda fountain featuring great ice creams.